-Caveat Lector- This is an unusual article to appear in this "China Friendly" paper. The Chinese govt would not release this info lightly. They are notorious liars about the state of their economy. They must be preparing for a very difficult year. flw South China Morning Post Thursday January 7 1999 Dark days ahead for economy, says Beijing MARK O'NEILL in Beijing and Agencies Beijing has given one of the most pessimistic assessments of its economic strength, days after announcing it was the world's fastest growing major economy. Finance Minister Xiang Huaicheng said yesterday there was "no room for optimism" on the economy and outlined measures designed to keep targets on track. Last week, the mainland announced its economy grew 7.8 per cent last year, missing its official target of eight per cent but outstripping every other large economy. "The internal and external economic situation in 1999 leaves no room for optimism," Mr Xiang said. Weak demand and the poor performance of state-owned enterprises had negative implications for growth. "The Asian financial crisis is worsening and uncertainty and instability in the world economy are increasing," Mr Xiang said. "Our export growth this year will be low or negative. Domestically, we have not solved the problems of over-supply, weak demand and the poor performance of state companies. We cannot underestimate the negative impact of these on the economy this year." In an attempt to breathe life into the economy, more bonds will be sold and the budget deficit expanded. Beijing will increase treasury bond sales to domestic investors by 13 per cent this year - to 316.5 billion yuan (HK$296.24 billion) from 280 billion yuan. The budget deficit will widen almost 10 per cent to 105.3 billion yuan from 96 billion yuan. Mr Xiang's ministry has been the main department charged with firing up the economy. It issued an extra 100 billion yuan worth of bonds last August for spending on irrigation, river embankments, rural electrification, roads, railways and other infrastructure. This spending pushed up fixed-asset investment in the second half of 1998 and should add about two percentage points to GDP growth in the first half of this year. "The economy is still in a period of deflation and credit contraction," economist Fan Gang said. "This year will be worse than last year. The [stimulus] package should work in the first half of this year. But if it does not stimulate personal investment, growth will slow down in the second half." Beijing is struggling to keep the economy on track as unexpected troubles, such as last summer's floods, place added burdens on state spending while hitting revenue growth. The Finance Minister said many investments, such as dyke rebuilding, would probably generate only low returns. It also would be difficult to boost private consumption and investment in the short term. Mr Xiang said the Government intended to return to international capital markets after last month's sale of US$1 billion (HK$7.74 billion) in bonds. He indicated China would be interested in holding euros as part of its reserves, saying it would not "place all its eggs in one basket". China has foreign reserves of about $144 billion, the world's second largest, believed to be in US dollars. DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRL gives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credeence to Holocaust denial and nazi's need not apply. Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at: http://home.ease.lsoft.com/archives/CTRL.html http:[EMAIL PROTECTED]/ ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED] To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED] Om
